From April 1, 2026, income tax return filing is set to become significantly easier with the new Income-tax Act, 2025. With simpler language, consolidated provisions and expanded pre-filled returns, salaried taxpayers may see a near “verify-and-file” experience, though careful review will still remain crucial.
Income tax filing overhaul in 2026: Pre-filled returns, simpler law, fewer hassles (Image: AI/FE)
Staring assessment year 2026-27, you might feel that filing of income tax return (ITR) has become slightly easier. With the new Income-tax Act, 2025 set to come into force from April 1, 2026, the government is preparing the ground for a simpler, cleaner and more technology-driven tax compliance system.
For millions of salaried taxpayers, the shift could mean fewer disclosures, more accurate pre-filled returns, and a filing experience that increasingly resembles a “verify and submit” exercise rather than a form-filling marathon.
Tax experts say the overhaul is not just cosmetic. It goes deeper into how income data is collected, reported and validated, with the aim of reducing errors, mismatches and unnecessary scrutiny — all of which have been long-standing pain points for taxpayers.
Before moving ahead, let’s understand key features and benefits of new income tax law, kicking in from April 1.
The Income Tax Act, 2025 has been introduced to modernise India’s direct tax framework, focusing to simplify and streamline tax legislation, making it more accessible, transparent, and less prone to litigation.
By adopting plain language and restructuring provisions logically, the Act aims to reduce taxpayer confusion and improve voluntary compliance. It also seeks to minimize disputes through clearer definitions and harmonized assessment timelines. The reform reflects India’s commitment to align with global best practices, improving ease of doing business, and fostering a trust-based tax environment.
In essence, the Act is designed not to overhaul tax rates, but to overhaul the tax experience – making it more predictable, efficient, and digitally enabled.
A new income tax law from April 1, 2026: What changes on paper
The Income-tax Act, 2025, which will replace the six-decade-old 1961 law, is designed to simplify both the structure and language of tax provisions. Instead of scattered sections and frequent cross-references, the new law consolidates related provisions and deductions in one place, making it easier to read and understand.
As Anita Basrur, Partner at Sudit K Parekh & Co LLP, explains, “The New Income tax Act 2025 is set to be in operation from 1st April 2026. The New Act has tried to make it simple by consolidating and keeping all relevant sections and deductions at one place for ease of reference and reading.”
For taxpayers, this clarity matters. A simpler law reduces interpretational confusion and, over time, could also help lower disputes and litigation.
Pre-filled returns take centre stage
One of the biggest visible changes for taxpayers filing returns in AY 2026-27 is expected to be the expanded use of pre-filled data. Over the last few years, the Income Tax Department has steadily increased reliance on technology, drawing information from employers, banks, mutual funds, insurers and other financial institutions.
According to Preeti Sharma, Partner – Global Mobility Services, Tax & Regulatory Advisory at BDO India, the intent is clear: “The intent of the proposed Income-tax Act, 2025 is to make tax compliance for salaried taxpayers significantly simpler from FY 2026-27 by moving towards a system where most income details are already available with the tax authorities.”
She adds that with “expanded use of pre-filled returns, wider third-party reporting through employers, banks and financial institutions, and seamless integration of AIS data, salaried individuals with straightforward income profiles are expected to experience a near ‘verify-and-file’ return filing process.”
In practical terms, this means salary income, TDS, bank interest and other commonly reported items are likely to appear automatically in the return form, reducing manual data entry and the risk of mistakes.
Simpler, but not fully automatic
While the new system promises ease, experts caution that taxpayers cannot afford to be complacent. Pre-filled does not mean pre-validated.
As Preeti Sharma points out, “taxpayers will still need to review and validate pre-filled information, particularly in cases involving additional interest income, capital gains or deductions, meaning that filing will be simpler but not entirely automatic.”
This review step remains critical, especially for taxpayers with income beyond salary — such as capital market investments, rental income or multiple bank accounts — where mismatches have historically led to notices and delays.
Technology-driven scrutiny, fewer routine checks
Another important shift expected under the new law is the way scrutiny is conducted. Rather than widespread manual checks, the tax administration wants to move towards exception-based scrutiny, supported by better-quality data.
Anita Basrur notes that “for the past few years the Government has been putting in efforts to make the tax filing process simpler. With the use of technology, a lot of data is available with the Government based on which pre-filled forms are made available for filing the returns.” She adds that efforts are being made to ensure “accurate data is captured to avoid mismatch and back and forth.”
While more information may be reported to the authorities, scrutiny is expected to be triggered mainly in cases where data anomalies or unusual patterns are detected, rather than routine filings.
Fewer chapters, clearer language, easier e-filing
From a structural standpoint, the new Act is also expected to reduce complexity for both taxpayers and professionals.
As Akshay Jain, Direct Tax Partner at NPV & Associates LLP, explains, “The Income-tax Act, 2025 replaces the 1961 Act effective April 1, 2026. The new Act contains fewer chapters and clearer language with the aim to reduce ambiguity and litigation.”
He expects “lower manual disclosures and easier e-filing due to streamlined obligations making ITR filing simpler for salaried taxpayers.”
Over time, this could translate into faster processing, fewer clarifications, and a more predictable tax experience.
What it means for taxpayers filing returns in 2026
For salaried individuals with straightforward income, the changes could significantly reduce the effort involved in filing returns. The combination of a simpler law, cleaner language, robust pre-filled data and technology-backed scrutiny is aimed at improving trust and compliance.
However, taxpayers will still need to stay alert, cross-check information and keep records, especially where income sources are diverse. The new law simplifies the process, but responsibility for accuracy ultimately remains with the filer.
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